Many foreigners who come to Southeast Asia are interestedin living in the area and in having a home, be it an apartment, acondominium or a house to live in. Because home ownership is socommon in other countries, many want to buy their own home or otherwisecontrol the property. We are not lawyers in each of the countriesbut we deal with lawyers and real estate professionals in all fourcountries and have helped others in the past. In all cases, werecommend that you work with a real estate professional; that you doyour due diligence and closely research the opportunity and that yousecure a well trained legal professional to assist you.Here is some guidance on laws and procedures throughout the area:
Thailand
Thailand follows the European or American system of land ownership andfee simple property ownership (the maximum level internationally) isavailable to Thai citizens. According to Thai law, foreigners, ingeneral are prohibited from owning freehold land in Thailand.There are however exceptions to this. Here are some of the waysin which foreigners in Thailand control property:
- Leasehold. Although Thailand restricts foreignownership of land, foreigners may hold total leasehold interest in Thailand and house leases. Thailand lease law allows a 30-yearmaximum lease period, with the possibility of renewing the lease foradditional 30-year periods.
- Condominiums – Thailand allows foreigners to owncondominiums up to a total of 49% of the total in the building ordevelopment.
- Company ownership – Thailand registered companieswith majority Thai ownership are able to buy land in Thailand. Inthe past it has been common for foreign national to acquire an interestin Thai land as minority shareholders in a Thai majority company.
- Company ownership – Board of Investment – BOIsponsored companies – Foreign companies with BOI privileges can own orlease land and build a factory in Thailand.
- Investment – Thai property law has provisions thatallow foreigners to buy and own a limited amount of land based on aninvestment of 40 million baht for five consecutive years, provided thatthe land is used for residential purposes.
- Thai spouse: A Thai spouse of a foreigner maybe allowed to buy land or property in Thailand in his or her ownname. Depending on the local authorities, the married couple maybe asked to sign a declaration at the Land Department to state that thefunds used are the separate property of the Thai spouse.This can act to waive any claim on the land or property by the non-Thaispouse. This could be problematic in a divorce case or insettlement of ownership at the death of the Thai spouse if the non-Thaispouse was to live longer. A well drafter prenuptial agreementmay assist in this but legally both spouses should understand the risks.
Cambodia
Although Cambodian officials would never admit it, Cambodian land lawhas followed Thai land law in many respects in recent years. Asin Thailand, full ownership of land in Cambodia is restricted toCambodians. There are however the following ways to control orown law open to foreigners in Cambodia:
- Leasehold. Although Cambodia restricts foreignownership of land, foreigners may hold total interest in Cambodian landand house leases. Cambodia lease law allows a 99-year maximumlease period.
- Condominiums – Cambodia allows foreigners to owncondominiums although the specifics of this are still developing.
- Company ownership – Cambodia registered companieswith majority Cambodian ownership are able to buy land inCambodia. In the past it has been common for foreign national toacquire an interest in Cambodian land as minority shareholders in aCambodian majority company.
- Company ownership – The Cambodia Investment Board(CIB) and the Cambodia Development Council (CDC) sponsored companies –Foreign companies with CDC and CIB privileges can own or lease land andbuild a factory in Cambodia.
- Citizenship – A foreigner can become a CambodianCitizen by payment of $50,000, which is paid to the government andnoted as a donation.
- Cambodian spouse: A Cambodian spouse of aforeigner may be allowed to buy land or property in Cambodia in his orher own name. This could be problematic in a divorce case or insettlement of ownership at the death of the Thai spouse if the non-Thaispouse was to live longer. A well drafter prenuptial agreementmay assist in this but legally both spouses should understand therisks.
Vietnam
Vietnam follows the Communist system of land ownership. All landbelongs to the people and is managed by the State on behalf of thepeople. People receive land-use rights – not landownership. Law recognizes no fee simple title. The maximumownership rights for Vietnamese are leasehold of land, althoughbuildings are improvements can be owned directly. Foreigners arenot allowed to own land. Overseas Vietnamese who were born inVietnam but later took up residence overseas can buy properties undergradually broadening criteria that are giving them property rights moreakin to local Vietnamese.
- Starting in 2009, Foreigners who are legallyresidents in Vietnam on a longer-term basis are permitted to purchaseapartments in certain developments under a 50-year leasehold. TheVietnam National Assembly approved this law overwhelmingly in 2008 butthe implementing regulations have yet to be published. Those eligibleto buy apartments under the law include foreign firms purchasinghousing for staff, and four categories of individuals.
- These include foreigners working at Vietnamesefirms, foreigners married to Vietnamese, foreigners with special skillsneeded by Vietnam’s economy, and foreigners who have been awardedmedals or other honors by the government.
- They can own a house but not the land on which it isbuilt. They have the option to lease the land from the State.
- A foreign investor may also invest in Vietnamesereal property by forming a joint venture company with a local partner,or a wholly foreign-owned company, or by forming a Build, Operate andTransfer (BOT) company or one of its variants.
- Foreigners who are residents in Vietnam can owndwelling houses but cannot sub-lease these dwellings. Foreign residentscan also sell, donate, inherit, or give dwelling houses as gifts. Butwhere they terminate their residence in Vietnam without disposal oftheir dwelling, 90 days after their departure from Vietnam theirdwelling house certificates will automatically cease to be valid, andthe Vietnamese State will manage and use their houses.
- One thing that separates real estate transactions inVietnam from the rest of the world is it's done in pure gold. Itis very important to keep this in mind when looking for a property. Thebuyer must be aware of the prices and conversion rates for currency togold at all times.
Laos
Laos follows the Communist form of land ownership. All landbelongs to the people and is controlled by the State. Laocitizens are granted land use ownership rights but the system does notrepresent fee simple ownership of land. Foreigners are prohibitedfrom owning land. Foreigners can lease land although generallythe lease needs to be 30 years in length. These are some of theprovisions over land lease by foreigners:
The average duration of leases is not more than 30 years, but the termof the lease can be extended on a case-by-case basis:
- land leased for building residences: 30 yearsmaximum with a possible extension
- land leased for investment and business activities,based on the scale of each project: 50 years maximum with a possibleextension
- land leased as part of a specific economic zone: 75years maximum
- land leased for diplomatic purposes andinternational organizations: 99 years maximum or as otherwise providedby agreements reached between the two governments.
